Residential property
You usually pay Land and Buildings Transaction Tax (LBTT) on increasing portions of the property price when you buy residential property, for example, a house or flat. LBTT only applies to properties over a certain value.
The amount you pay depends on:
- when you bought the property
- how much you paid for it
You must send an LBTT return if you pay more than £40,000 for a property - even if there’s no LBTT due. There are some exemptions.
Buildings that are residential are:
- used or suitable to use as a dwelling
- dwellings in the process of being built
- a building being adapted for use as a dwelling
Multiple occupancy dwellings that are residential include:
- residential accommodation for school pupils
- residential accommodation for students (other than halls of residence for further or higher education)
- residential accommodation for members of the armed forces
Residential property rates and bands
LBTT rates and bands for residential transactions as of 1 April 2021:
| Purchase price | LBTT rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Over £750,000 | 12% |
For chargeable consideration above the nil rate band, calculate the amount due within each rate band then add these together to reach the LBTT due.
Examples
| Chargeable consideration (purchase price) | Rate band | Consideration within band | Rate | LBTT amount |
|---|---|---|---|---|
| £135,000 | up to £145,000 | £135,000 | 0% | Nil |
| Total LBTT | Nil |
| Chargeable consideration (purchase price) | Rate band | Consideration within band | Rate | LBTT Amount |
|---|---|---|---|---|
| £235,000 | Up to £145,000 | £145,000 | 0% | £0.00 |
| £145,001 to £250,000 | £90,000 | 2% | £1,800 | |
| Total LBTT | £1,800 |
| Chargeable Consideration (purchase price) | Rate Band | Consideration within band | Rate | LBTT Amount |
|---|---|---|---|---|
| £875,000 | Up to £145,000 | £145,000 | 0% | £0.00 |
| £145,001 to £250,000 | £105,000 | 2% | £2,100 | |
| £250,001 to £325,000 | £75,000 | 5% | £3,750 | |
| £325,001 to £750,000 | £425,000 | 10% | £42,500 | |
| Over £750,000 | £125,000 | 12% | £15,000 | |
| Total LBTT | £63,350 |
First-time buyers relief
A relief for first-time buyers is available, which increases the residential nil rate band of LBTT to £175,000.
For effective dates after 1 April 2021, the availability of the relief will result in a reduction in tax of up to £600 for first-time buyers.
Rates during the period 15 July 2020 to 31 March 2021
LBTT rates and bands for residential transactions were changed on a time-limited basis with effect from 15 July 2020.
For transactions where the effective date is between 15 July 2020 and 31 March 2021 (inclusive of these dates), the temporary increase in the nil rate band to £250,000 introduced in July 2020 will apply.
First-time Buyer Relief would therefore have had no practical effect during the temporary period in which the £250,000 nil rate band threshold was in place.
LBTT rates and bands for residential transactions with an effective date of 15 July 2020 to 31 March 2021:
| Purchase price | LBTT rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 0% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Over £750,000 | 12% |
Rates prior to 15 July 2020
LBTT rates and bands apply for residential transactions with an effective date before 15 July 2020
| Purchase price | LBTT Rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Over £750,000 | 12% |
Use the LBTT calculator to work out how much tax you’ll pay.